Tomahawk, WI 11/13/2013 (BasicsMedia) – Investor confidence soared on Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) stock following the largely positive report from the FDA review panel. The stock nearly doubled on Nov. 12, sky rocking to gain 95.93% in the regular session.

Vanda develops drugs for the central nervous system problems and its tasimelteon is being proposed for the treatment of non-24-hour disorder, a sleeping problem of people with impaired vision. The drug aims to help blind people to achieve proper night sleep since such people, due to their lack of sight, the body doesn’t respond to sleep as do in those people with proper vision. Following the clinical trials on the drug, it has been proven to be hugely effective in this regard. This is why when a brief report appeared on the FDA website regarding tasimelteon, it only served to boost confidence in the stock.

Solution for the blind

So far, the FDA posting appears to paint the experimental drug in positive light. However, the FDA advisory panel is expected to vote on a recommendation on the drug Thursday. The panel’s vote can go either way – that is for or against the approval of the drug when they put the recommendation to voting. However, considering the reviewers’ posting so far, it’s likely that tasimelteon is going to get a firm approval for treatment of non-24 hour disorder. But again, even after the panels’ approval, FDA holds the last say regarding the fate of the drug. It could recommend further study or okay the approval.

If the experimental drug sails through, Vanda would have attained a milestone with tasimelteon whose uptake is expected to high due to its significance in non-24 hour disorder treatment. Vanda already has schizophrenia drug called Fanapt. The performance of this drug so far has been nothing but impressive. Now adding tasimelteon to this already successful portfolio will be very crucial to Vanda’s revenue earnings and net income.

For biopharmaceutical stocks, offering up a new drug for approval or seeking to extend the mandate of an existing drug is always a big gamble. Most companies in this industry face cash flow problems or at least go for decades without bringing a new drug to the market.

Encouraging growth in 2013

Investor confidence in Vanda is understandable considering the potential success of tasimelteon if it wins the FDA approval. However, before Thursday when the panel puts the recommendation to vote, exercising caution in this stock is called for. A lot of investors could burn their investment if things turn in unexpected way that the recommendation doesn’t sail through. Also, a verdict that would call for further study on the drug would be equally damaging. Nonetheless, Vanda is a growing stock, its trail so far this year is encouraging and it seems to have enough gas to continue soaring. Coming from the low of $2.92 a share in the past 12 months and now trading around $13.30 per share, the biopharma company has witnessed astounding percentage growth in its share value. Currently Vanda has $378.83 million in market value with 28.48 million in outstanding shares.

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